Assuming the Santa Fe cost ~$30, she is probably about $5K or so underwater(that is a big assumption, but with the information present, its the best I can do) and probably still owes something like $15k to $20k, and has payments for the next 4.5 years(assuming 7 year loan... ugh...).
She has $200K in cash in her 401(k) which she can access in total the minute she retires. She could easily pay off the entire vehicle in cash after retirement.
Then, $180K * .04 = ~$600 per month. Plus SS of probably $1,500 at least. That is $2,100 per month. Not a great living, but for a single person who is retired, it should be enough.
Contrast that to selling the car, paying the $5k to get out of the loan, and then paying another $8K to get a cheaper SUV(could also go with a pick-up truck or minivan). In this scenario you save ~$2k to $7k total. That comes out to about an extra $23 a month in retirement income.
The car is hardly an emergency type of situation, although it is definitely a bad deal and I might advise the same way you are strictly on principle.